Home sales, price at 2011 high

July 12, 2011

Updated Aug. 21, 2013 1:17 p.m.

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One of the things Terryl and Mike Nirtaut like the most about their newly purchased 4-bedroom house on Corriente Lane in Mission Viejo is the light from all the new windows. The house was an eyesore when investor Testa Capital Group bought it last year. The driveway was dirt. The landscaping was dead. The windows were boarded up and the roof was shot. The property investor spent 90 days fixing the former foreclosure up, putting in new windows, doors, floors, roof and kitchen appliances. He installed granite countertops. He had five offers within 10 days, including some to pay all cash. SAM GANGWER / THE ORANGE COUNTY REGISTER

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Terryl and Mike Nirtaut along with baby Owen, 11 months, sit in the kitchen dining alcove of their newly purchased four bedroom house in Mission Viejo. Escrow closed on June 30. SAM GANGWER / THE ORANGE COUNTY REGISTER

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Investor Testa Capital Group spent 90 days fixing up this formerly foreclosed home. It sold in June for $469,000, more than $100,000 less than an earlier owner paid in 2004. SAM GANGWER / THE ORANGE COUNTY REGISTER

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The kitchen of Mike and Terryl Nirtaut's newly purchased home in Mission Viejo has all new stainless steel appliances. SAM GANGWER / THE ORANGE COUNTY REGISTER

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The builder installed new granite beveled edge countertops in the kitchen of the Corriente Lane home bought by Mike and Terryl Nirtaut. SAM GANGWER / THE ORANGE COUNTY REGISTER

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A bank of windows take up nearly an entire wall of the master bedroom of Terryl and Mike Nirtaut's 4-bedroom house on Corriente Lane in Mission Viejo. SAM GANGWER / THE ORANGE COUNTY REGISTER

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A gooseneck kitchen faucet with a pullout head is one of the kitchen upgrades investor Testa Capital Group put in the remodeled kitchen. SAM GANGWER / THE ORANGE COUNTY REGISTER

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The entryway of the home, as well as the common areas, kitchen, living room and hallways all have tile flooring. SAM GANGWER / THE ORANGE COUNTY REGISTER

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Recessed lighting was installed in the ceiling of the living room of Terryl and Mike Nirtaut's newly purchased Mission Viejo home. SAM GANGWER / THE ORANGE COUNTY REGISTER

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The driveway and entry walkway were redone with a pattern that mimics the tile inside the house on Corriente Lane in Mission Viejo. SAM GANGWER / THE ORANGE COUNTY REGISTER

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Orange County home prices took an unexpected turn up in June, as homebuyers paid a median selling price of $445,000 — highest for the year (and since September) and back to the year-ago level. BRIAN MOORE / THE ORANGE COUNTY REGISTER

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Tustin home with three-car garage sold for $850,000 on June 30. It has four bedrooms, three bathrooms and more than 2,600 square feet. COURTESY OF HILLARY THOMAS, PRUDENTIAL CALIFORNIA REALTY

One of the things Terryl and Mike Nirtaut like the most about their newly purchased 4-bedroom house on Corriente Lane in Mission Viejo is the light from all the new windows. The house was an eyesore when investor Testa Capital Group bought it last year. The driveway was dirt. The landscaping was dead. The windows were boarded up and the roof was shot. The property investor spent 90 days fixing the former foreclosure up, putting in new windows, doors, floors, roof and kitchen appliances. He installed granite countertops. He had five offers within 10 days, including some to pay all cash. SAM GANGWER / THE ORANGE COUNTY REGISTER

The Nirtauts' four-bedroom house used to be the eyesore of Corriente Lane.

After the bank seized the home, it sat empty and forlorn for at least a year, windows boarded up, landscaping dead, and a dirt driveway.

"Did you see the place before you moved in?" neighbors asked Terryl Nirtaut, 38, after she and her husband bought the home last month.

"They're really happy to have someone in the house," she said.

The Corriente Lane house typifies what's happening in the region's schizophrenic housing market.

Sold at the top of the market, it ended up in foreclosure, its value plummeting. Then it was rescued by a cash-paying investor, refurbished and, late last month, sold in days after getting multiple offers.

New housing figures out Tuesday also show the market's split personality. Orange County housing remains hamstrung by foreclosures and debt, with investors making up one out of every five homebuyers – far above the normal level.

But there also were some surprises in June's housing numbers from DataQuick Information systems. For one thing, both sales and prices were at a 2011 high.

And the median home price – or price at the midpoint of all sales – actually surged to $445,000 – up $20,000 from May.

"We just have a feeling over here that we're on the brink of things settling down," said Prudential California Realty agent Hillary Thomas, who sells homes in Villa Park and Newport Beach. "We've had two open houses the last two weekends, and we had 50 people go through them. Normally, we get about 14 or 15 if we're lucky.."

DataQuick's latest Orange County figures show:

•Last month's median price of $445,000 was unchanged from June 2010 levels. It was the highest price for O.C. since September and just $5,000 shy of the post-recession high of $450,000 hit last year.

•Last month's sales total of 2,947 transactions was down 13.9 percent from June 2010, but was up 11 percent from May. It also was the highest monthly tally in a year – and fifth-highest in four years.

•Still, last month's sales were 31 percent below the average of nearly 4,300 deals in the past 24 Junes.

Few experts are willing to call an end to the housing doldrums. Some warn it's going to take years to clear the backlog of distressed housing that's dragging down home prices.

"The housing market remains dysfunctional and lopsided, just somewhat less so," said DataQuick President John Walsh. "A lot of potential buyers are either stuck, for lack of equity, or spooked."

Local observers noted that sales figures and prices were skewed by last year's false exuberance spurred by homebuyer tax credits. .

"The tax credit last year pulled all those sales forward," said Prudential California Realty broker Rich Cosner. "That's why sales collapsed the last half of the year."

With the tax-credit bubble behind us, Cosner said, future sales will be equal to – or even better than – previous year's totals.

DataQuick numbers show also that the foreclosure pipeline is shrinking. Lenders seized 646 homes from defaulting homeowners last month – about average for the past two years. But default notices – issued when homeowners fall at least three behind on house payments – dropped to 1,267. The two-year average is more than 1,600 a month.

Bank-owned homes and those sold under threat of foreclosure still make up more than 40 percent of the homes sold in Orange County, according to the Southern California Multiple Listing Service. And investors buying those homes at bargain prices make up a significant part of the market.

According to DataQuick, 20 percent of Orange County homes sold last month were bought by absentee buyers who most likely were investors. The average number of such buyers since 2000 was 12.5 percent. Just over 29 percent paid cash, compared to an average of 12 percent.

Dane Schaiterer, a Realty One Group agent who sold a formerly foreclosed home in Anaheim last month, said about two-thirds of the investors in today's market are making a profit.

"God love these people," he said of investors. "They put money in the deal (and) fix the properties up."

For his part, Schaiterer said, the market remains grueling, with commissions as low as three-eighths of a percent.

"But it's a paycheck," he said. "What else can I do?"

Investors Testa Capital Group paid about $400,000 in cash to buy the Nirtauts' Corriente Lane house from a bank in June 2010.

Neighbors who paid more than $700,000 for their homes were nervous when the bank took back the home and boarded up the windows. Testa spent three months installing new windows, doors, flooring and appliances, paving the driveway and putting in fresh landscaping.

When it was done, the home looked new. But the price paid by the Nirtauts -- $469,000 – was more than $100,000 below the amount paid for the home in 2004.

Terryl and Mike Nirtaut had been home shopping for six months when they decided to buy the house. With FHA financing and a small down payment, the first-time homebuyers managed to submit the winning bid and get the house for less than they planned to spend. They were settled in by July 4th.

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